Energy Report Oman

At an average of 11% a year over the forecast period (2015-19), energy consumption will grow faster than real GDP growth, which The Economist Intelligence Unit forecasts will average 2.9% a year over the same period. Annual energy consumption will rise from 30.9m tonnes oil equivalent (toe) in 2014 to 52.4m toe in 2019.

Growth in energy consumption is driven by the increase in demand for electricity by both the residential and the industrial sector. The government subsidises gas that is allocated to industrial projects, to promote growth and encourage foreign companies to undertake projects in the sultanate. The direct government subsidy on electricity supplied through the Main Interconnected System (MIS) amounted to US$717m in 2012.

Oman lacks the energy and financial reserves of its wealthy Gulf neighbours and its state budget has been hit hard by the decline in oil prices-Oman, which relies on oil export revenue for 77% of its budget, is running its biggest fiscal deficit since 1990.